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A three-member delegation from the European Investment Bank is
currently holding talks in Cyprus to examine the repercussions of the
destruction of the Vasiliko power plant.

According to Acting Spokesman for the Electricity Authority Ioannis
Tsouloftas, the delegation had a meeting with the Director General of
the Electricity Authority of Cyprus, and this afternoon it will visit
the islands main power plant, Vasiliko.

Tomorrow, the delegation will confer with EAC officials, the Minister
of Commerce, Industry and Tourism, as well as the Ministry of Finance,
to discuss the damage caused to Vasiliko and the impact on the natural
gas project.

On Thursday, the EIB delegation will examine issues concerning the EACs
economic forecast for 2011-2015, following the Vasiliko damage, and the
financial needs of the Authority.

Thirteen people were killed and dozens were injured when a massive
explosion occurred at the naval base, Evangelos Florakis, near
Limassol, on the southern coast, in the early hours of July 11th. The
blast badly damaged the islands main power plant, at Vasiliko,
resulting in daily power cuts.

The blast occurred in containers, full of munitions, which Cyprus had
confiscated from ``Monchegorsk``, a vessel sailing from Iran to Syria
in 2009. Nicosia was acting in accordance with UN sanctions against
Teheran.

A one-man investigation commission, set up by the government, is
already examining the circumstances that have led to the massive
explosion.

The government and the main trade unions have agreed on a package of
austerity measures aimed at fiscal consolidation.

Government Spokesman Stephanos Stephanou has sent a message to all
parliamentary parties to be constructive during the voting in the House
of Representatives on the package.

Speaking on Tuesday evening after President Demetris Christofias and
the trade unions had agreed on the package, Stephanou said the
agreement contained substantive structural changes for fiscal
consolidation, including the gradual abolition of vocational retirement
schemes in the public and the broader public sector, and the immediate
inclusion of new staff in the Social Insurance Fund, so that ``everyone
has a single pension fund and receives a pension based on the same
criteria.``

He added that the package includes measures that would give the state
an immediate increase in revenue and reduce expenditure.

According to the agreement, public servants will contribute, for the
next three years, 3% annually to the state coffers, and will reassess
the situation in the future. There will also be a reduction of 10% in
the salaries of newcomers in the public sector.

Stephanou furthermore noted that the Council of Ministers would be
convening on Wednesday to finalise the package of measures and send the
proposed legislation to the House of Representatives for approval.

He said the Minister of Finance would be analysing the cost of the
package and its prospects at the House Committee on Finance, which
meets today.

The Spokesman said the economy issue was very serious and that the
package could address the immediate challenges and pave the way for
major structural changes, in order to secure the robustness and
vitality of the economy.

He added that the Government would continue the dialogue for additional
measures concerning the situation caused by the deadly explosion at the
Evangelos Florakis Naval Base, the shockwave of which destroyed the
island`s main power plant.